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We define a financial conflict of interest as a situation in which a person, institution or organization has more than one financial interest in a particular investment vehicle or asset. The problem occurs when parties whose interests are singular, and thus not compromised, depend upon a conflicted individual or institution for primary advice concerning the purchase, sale or retention of the conflicted financial asset. The conflict "corrupts the motivation of the individual or organization" providing advice.
According to the White House's Council of Economic Advisers, "conflicted retirement investment advice costs investors $17 billion each year,"
The US Department of Labor recently held a hearing on conflicts of interest in the provision of retirement investment advice. The goal of the hearing was to gather testimony on the Employee Benefits Security Administration's (EBSA) proposal to reduce conflicts of interest in the retirement advice marketplace.
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